Brad sold a rental house that he owned for $250,000. Brad bought the rental hous

Question

Brad sold a rental house that he owned for $250,000. Brad bought the rental house five years ago for $225,000 and has claimed $50,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

a.$25,000 ordinary and $50,000 unrecaptured §1250 gain.

b.$25,000 §1231 gain, that is not unrecaptured §1250 gain, and $50,000 unrecaptured §1250 gain.

c.$75,000 ordinary gain.

d.

$75,000 capital gain.

e.None of these.

a.$25,000 ordinary and $50,000 unrecaptured §1250 gain.

b.$25,000 §1231 gain, that is not unrecaptured §1250 gain, and $50,000 unrecaptured §1250 gain.

c.$75,000 ordinary gain.

d.

$75,000 capital gain.

e.None of these.

Explanation / Answer

b.$25,000 §1231 gain, that is not unrecaptured §1250 gain, and $50,000 unrecaptured §1250 gain.

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